Indonesian adspend rises sharply

25 June 2013

JAKARTA: Figures for gross advertising expenditure in Indonesia showed a sharp rise in the first quarter, which observers expected would be maintained during the rest of the year.

Adspend was up 23% to Rp 23.2tr according to Nielsen, the market research company. And PT Media Nusantra Citra (MNCN), a leading media company, predicted that the annual data would show an increase of between 15% and 20%.

"More local companies, such as Mayora and Kalbe, will spend on advertising", Teddy Pun, head of investor relations at MNCN, told the Jakarta Post.

"Local companies are getting stronger in line with growing domestic consumption," he added, as he defined a 55:45 value split between local and international companies advertising via MNCN.

He also observed that multinational firms invested proportionately up to four times more, allocating 12-15% of their spending to advertisements, compared to the 3-4% of local businesses.

One major advertiser, the processed food producer PT Mayora Indah, indicated it would reduce the frequency of its advertising but not the value, as it sought to maintain brand awareness.

"We used to hit all areas. There were ads for Mayora products at every hour on every television station," explained Yuni Gunawan, Mayora corporate secretary. "We may be more selective and choose prime time slots," she added.

The category registering the greatest increase was 'government, political organisations' which leapt 55% over Q1 2012 thanks to regional elections during the period.

The single biggest category, however, was 'communication equipment services' which slipped back 3% to Rp 1.1tr.